Living Together Agreements - Protecting Your Interests and Property

The way in which people approach relationships and domestic arrangements has shifted significantly over recent years. Many couples now choose to live together without getting married, either as a step toward marriage or as a long-term alternative. However, it's crucial to understand that unmarried couples do not enjoy the same legal protections as those who are married, which can lead to serious consequences if the relationship breaks down or one partner dies.

To tackle these potential issues, more people are turning to living together agreements, which are also known as cohabitation agreements. This is a formal document that defines each partner's rights and responsibilities. This guide will break down the importance of such agreements.

The Legal Position of Unmarried Couples in England and Wales

One of the most important facts to understand is that living together does not create the same legal status as marriage. Despite popular belief, the notion of a “common- law marriage” has no basis in English or Welsh law. Simply cohabiting, even for many years, doesn't grant couples the same rights as married partners.

Without the legal framework that marriage provides, cohabiting individuals may find themselves in a vulnerable position, especially regarding finances and property.

What Exactly Is a Cohabitation Agreement?

A cohabitation agreement (also known as a living together agreement) is a contract that defines how two people living together as a couple will manage their finances, property and other shared responsibilities.

This type of agreement helps clarify each person's role in the relationship and outlines what will happen to shared and individual assets if the relationship ends.

Key Elements to Include in a Living Together Agreement

A comprehensive agreement should address several essential areas to reduce ambiguity and potential conflict. These may include:

• Ownership and Financial Contributions - Specify who owns what, how bills like rent or mortgage payments will be divided and how ongoing contributions will be managed.
• Protection of Individual Assets - Outline which assets each partner brought into the relationship, including savings, investments, or property and how those will be treated if the couple separates.
• Future Arrangements for Children on Separation - If the couple has children, the agreement can record their joint intention as to where the children live, any contact arrangements and financial support, helping to promote consistency and certainty for everyone involved. However, any agreed provisions for future child arrangements will not be legally enforceable in the same way any financial provision if a dispute arises, in which case a child arrangements order will need to be sought. The court will base their decision on what is in the best interests of the child rather than the terms in the deed. It is, however, an important issue to address in the agreement.
• Dispute Prevention - Clear agreements can prevent emotional and costly disputes by removing confusion about who is entitled to what.

What is included in a Cohabitation Agreement

If you're considering entering into a cohabitation agreement, legal representation is vital in creating a fair and enforceable agreement which involves several steps:

1. Full Financial Disclosure
   Both parties must be transparent about their financial situation. This includes sharing information on all assets, debt and income. Without full disclosure, the agreement may not be valid.
2. Clear and Specific Terms
   The document should be easy to understand and thoroughly detailed. It must cover all key areas such as ownership, finances and asset division to prevent future misinterpretation.
3. Ongoing Revisions
   Life circumstances change whereby new assets may be acquired, children may be born or financial situations may shift. It's essential to revisit and update the agreement as needed.

Can a Cohabitation Agreement Be Enforced?

Yes, provided certain legal criteria are met, a cohabitation agreement can be legally binding. For the agreement to stand up in court, it should:

• Be written and signed by both parties
• Include honest and complete financial disclosure
• Be entered into voluntarily, without pressure or manipulation
• Be realistic and fair at the time it is made
• Be signed after both parties have received independent legal advice

If these conditions are satisfied, courts are generally willing to uphold the agreement in the event of a dispute.

How Do Cohabitation and Prenuptial Agreements Differ?

While they may appear similar, cohabitation agreements and prenuptial agreements serve distinct purposes:

• Cohabitation agreements are for unmarried couples living together and focus on their shared and separate financial obligations and property rights.
• Prenuptial agreements apply to couples planning to marry and typically deal with how assets will be divided in case of divorce.

Though the two may overlap in subject matter, they are used in different contexts and follow different legal frameworks.

What Happens Without a Cohabitation Agreement?

If a cohabiting couple separates without an agreement in place, disputes over property or finances are settled under trust and property law, not family law. This can lead to uncertain and potentially unfair outcomes, as the courts do not assume equal sharing like they might in divorce proceedings.

By having a cohabitation agreement in place, you can avoid costly court proceedings such as an application in the Family Court under Schedule 1 of the Children Act 1989 for orders for financial relief to meet a minor child's financial needs.

Having a cohabitation agreement can help avoid such disputes entirely, offering a clear and legally recognised roadmap in case the relationship ends. As the saying goes, “prevention is better than cure.”

How We Can Support You

For couples who choose to live together without marrying, cohabitation agreements provide a critical legal safety net. They ensure that both parties understand their rights and obligations and help protect individual assets and interests in the event of a breakup.

Since the law does not recognise “common-law marriage,” taking proactive steps to define your legal position through a cohabitation agreement is one of the most effective ways to gain peace of mind.

If you're thinking about putting a cohabitation agreement in place, our team of experienced solicitors can guide you through the process. We'll work with you to ensure your agreement is fair, thorough and tailored to your needs, handled with professionalism and care from start to finish. Visit our website to book your consultation

For those of you that already have an agreement that you would like drafting into a cohabitation agreement we are able to offer a fixed fee package.

Written by Arzu Lone